>> good morning from bloomberg's european headquarters in the city of london. this is bloomberg daybreak: europe. these are today's top stories. >> i want us to leave the eu with a deal so it's an orderly exit. this decision enables us to do that. the eu and u.k. agree on a brexit delay until the end of october. theresa may still needs to send the extension to a hostile parliament. a dovish draghi warns the slowdown could worsen. we will get the view, live from washington later today. wall street on capitol hill.

u.s. bank chiefs are grilled on everything. first-quarter results hurt -- hit tomorrow. ♪ good morning. welcome to daybreak. color, please hold until the end of october. we are in suspended animation on the pound. we are frozen in time because nothing has been decided upon apart from extension period look at volatility on the pound. down it has gone for eight days in a row. this is the lowest we have seen. since last year. all ethics volatility is repressed -- f x volatility is repressed. are we closer to hard brexit?

are we closer to an election? all pre-mutations are on the table. let's look at the risk of -- risk on the radar. between the stock inventories in the united states versus opec's commitment to cut which is very much along the line of our guest from yesterday. compliance its 155%. copper is down. would you believe more? how much of a slowdown is their relative to draghi's my dark -- remarks yesterday? had we benchmark that against what the rest of the world is telling us? good morning. nejra: good morning. yes, central banks were in focus yesterday. we got fed minutes showing that the fed will be on hold until the end of the year. u.s. stocks ended the session

higher. we saw the 10 year yields dip higher. futures are flat. in the fx space, you showed the commodities. we have been seeing pressure on commodities. i put the euro appeared because economists after mario draghi's news conference said, he might have put on his dovish hat. we saw the euro and yesterday's session higher. in terms of the guidance, the slowdown could persist towards the end of the year. he was asked about tearing, what it means. he actually said, i don't really know. a lot to get into this hour. let's check in on the markets of in asia. a little bit of a weaker session. asian stocks down for a second session in a row. led by what you are seeing in the chinese market. you can see that sei 300 down. we had inflation numbers coming

through at 2.3% rise on the month. that was expected. that was really driven by food prices, particularly pork. hong kong's market under pressure. i.t. stocks leading the decline there. pretty flat on the nifty. let's have a look at some of the stocks we have been watching. bank of queensland, the biggest laggard in australia. queensland had already forecasted second half earnings that are unlikely to improve. watching these pharma stocks in hong kong. this one is weaker but a lot of them have been jumping. this is after reports that china has confirmed 18 cases of a deadly super fungus infection. we've been watching the blackhole. there has been some market reaction here. a rally in china telescope and lens stocks. we've got phoenix there listed in the hong kong market, up by

the daily limit today. manus: only one woman in the world can tie markets to the blackhole. let's talk about brexit. it's been delayed. after six hours of talks in brussels, the eu agreed to postpone the departure until the end of october. that was a compromise between the prime minister's desire for a short extension and donald tusk's call for a longer one. >> this extension is flexible. a little bit shorter than i expected. to find theenough best possible solution. please do not waste this time. u.k. can leavee the eu sooner if parliament ratifies a divorce agreement. the delay means that it may have to hold european elections next month. >> i know that there is huge frustration from many people as

i had to request this extension. the u.k. should've left the eu by now. i sincerely regret the fact that i have not yet been able to persuade parliament to approve a deal which would allow the u.k. to leave in a smooth and orderly way. manus: let's get straight to brussels. overnightds pact or bag, she's on the ground. neither fish nor fowl. what exactly was agreed? does it suit anybody? >> it was certainly a compromise. good morning to you. thedate was not as she -- extension was not as short as emmanuel macron wanted. it was not exactly what to risk it wanted. it was not what theresa may wanted. it was a compromise eight. they stayed up late into the night to reach that compromise. important things to remember, it averts the risk of no deal

brexit tomorrow. that was lingering over us at the beginning of this week. it is flexible. the u.k. can leave earlier should they be able to get their act together domestically and vote for an earlier departure. the u.k. does have to participate in eu elections could produce uncertain outcomes. that's unless the u.k. parliament manages to pass an agreement in the first few weeks of may. important point, some diplomats keen to point out that other extensions could possibly be available if this one proves not to be long enough. it takes us back to that blackhole story. nejra: great point. might not be the final extension period that brings us to the question of what the political implications are for theresa may. how is she going to frame this back in the u.k.? >> we heard from her late last

night. she will be making a statement soon. over the next 24 hours. she is safe in a sense. she's under an enormous amount of pressure. she cannot be forced out by members of her own party right now. at least not according to the letter of the law. to oust her in december, they failed. they have to wait a year. she is safe until december. she is under some much pressure, there's an open contest to replace her already underway in the u.k. tory party. she's under a great deal of pressure. she promised to leave was the withdrawal agreement has been delivered. does october give her long enough to try to deliver that? does it give enough time to rivals to try to mount a campaign to oust her? we could be in a permit contest over the next seven months or so. as one of our colleagues also points out, october is conference season. it's political party season which usually means labour and

conservative are talking to their base. that heightens the attention around the deadline. nejra: great to have you with us. thank you some of. joining us now is our guest. great to have you with us. thanks for joining this moment. help us find some light in the blackhole that anna referred to. where do we go from here? is the focus actually going to turn much more towards tory infighting rather than getting any kind of resolution? >> certainly over the next six months, that will be a constant backdrop. seek a successor within the conservative party. to keep the party united and have brought her -- broader appeal. bring it back to the near term, it is still game of framing the withdrawal deal with the government as better than the alternative. and the negotiations

potential indicative vote process which we've had twice is all designed to show a less palatable alternative so that those members of her own party who are not backing the deal we will hold our noses go with what the prime minister has negotiated. manus: do you think we are closer to the tories throwing theresa may out? hard brexit year rising to power. and then hard brexit, much more pressing than we perhaps anticipate. >> i still have a likelihood function very low for a hard brexit. away fromneed to go the melodrama taking place in the conservative party and look at what parliament, the u.k. parliament has consistently voted against. you could argue, everything. it has voted against in large numbers leaving with no deal. that ultimately will drive that

likelihood close to zero. within the conservative party itself, will it try other mechanisms to try to unseat theresa may ahead of the withdrawal deal? we are already seeing those processes going through. i don't think they have a great chance of success. what does this delay due for the u.k. consumer? do they start spending because they see a permanent delay situation? >> u.k. consumers over the last 2.5 years have actually stuck their fingers in their ears and ignored what is going on in westminster. who blames them? they kept their spending a relatively decent levels. given what has happened in terms of the pressure on real rate -- wages. the longer it goes on, the harder it gets to ignore. they have been drawing down into savings. participants, there's

an attraction there. you need to be confident that consumer spending is going to hold through this political uncertainty and come out the other end. that's a fair gamble to take. dig a can we take -- little bit deeper on the economics. you are the chief economist. let's have a look at the gdp. concerns, many have said it is part of the support mechanism in the numbers. financial services and insurance firms cut their output for 12 consecutive months. the longest run since 1997. this reminds me of economic data back in the post-lehman. period.lehman the pain is yet to come. we disappeared our economic growth. >> you are absolutely right. there's a couple of sectors.

the financial services is actually the -- absolutely the want to be looking for. the slowdown in business investment is very clear in the u.k. data. and how that actually is passing through to financial services activity. go to locate agnostic of what version of brexit takes place. they are already executing their contingency plans. yes, the numbers haven't moved in terms of employees. but actually you are getting strategic functions, moving across. that is underlying your data. it is it broadened yet into the gdp data. you are right. this could be a leading indicator. nejra: are you still advising clients to buy u.k. equities? >> yes. u.k. equities are valued one standard deviation between -- below their long-term average. there is a valuation opportunity

there. if you believe that the no deal likelihood is overstated, you should expect to rerate it. the problem for investment communities around the world, they know this story. they know the undervalued story. people like myself. without the duchess of brexit, she couldn't do it. she's the best in the business. it's hard for us all to do this and give the kind of assurance to investing committees who want to look at the u.k., tell me the roadmap and show me how it's resilient. it's a very tough job to do. manus: you are absolutely right. --n the duchess of project brexit says, i'm lost for words, you know it's all over. simon stays with us. so much to get through. let's get you your first word news. debra mao is on the team in hong kong. chiefs faced a

grilling from congress yesterday. they were questions on everything from income inequality to their ties to politically controversial industries. there was consensus that cybersecurity is a major issue facing the financial system. >> cyber risk is the biggest risk the financial system faces in the world. it's a global risk. >> i believe that cyber is a clear and present danger to the financial system. existentialhe most threat to the financial system. >> we are in a war on cybersecurity. agreedral bank officials at the block slowdown hasn't worsened. bloomberg has learned that some are skeptical about a pickup in the second half of the year. the federal reserve is grappling with significant uncertainties that the message from the latest fomc minutes. several officials said their views on rates could shift either way. the u.s. and china are pretty much agreed on enforcement over

a trade deal. that's agreed to -- according to steven mnuchin. the are nearing an accord after recent high-level meetings between beijing and washington. negotiators are discussing when president trump and xi could sit down to sign off on it -- an agreement. india's election begins. it's the biggest democratic election in the world. the prime minister is seeking another five-year term. theopposition is led by congress party. this is bloomberg. ♪ nejra: debra mao in hong kong. eating up on her last story about the indian election, our mliv team are writing that elections are looming large across the em universe this year. india and indonesia are about to go to the polls. results due from thailand. it's worth recalling what a

surprise result can do. we are asking the question on will how big an influence elections be on the performance of local assets? idiosyncratic stories versus the dollar and dovish central banks. reach out was at -- and the mliv team. manus? manus: coming up, we are live from the imf world bank spring meeting. that miss our interviews with the managing director of the imf. as well as the governor of the bank of italy and the south african reserve bank. all coming up. francine is definitely on tour. if you are traveling to work, you know what to do. this is bloomberg. ♪

hitch inm a rich a london. -- nejra che pitch in london. manus: very happy to be back in my to buy studio. four days on the road, i was getting ready -- worried that they would leave me in the desert. we have asia lighting up ever so slightly. s&p futures unchanged. softer inflation data. was the fed dovish enough? there you go. it pops back. quarter of 1%. mosting is just really the pragmatic thing i've seen in response to this. neither fish nor fowl extension. go to google. nejra: you've talked about cable there. let me talk about the aussie dollar coming under pressure. commodity currencies coming under pressure little bit. oil retreating from a five-month

high. the beauty i trading at 6431. crude inventories rising to the highest since november 2017. swelling u.s. stockpiles undermining opec to some extent. we saw gains on the stoxx 600 yesterday. and ito also and -- higher even the mario draghi's message was taken dovish by economists. was get to the bloomberg business flash. debra mao in hong kong. >> number is latest attempt to revamp is falling flat with investors. it's decline is outpacing that of notoriously poor performers like deutsche bank. it is valued at a 58% discount. that's the widest gap since bloomberg began tracking the data. -- sales has moved beat estimates in the first quarter. the fashion and leather division posting a 50% rate -- 15% gain.

the luxury industry is in its third year of rapid growth. millennial and jens the shoppers are warming up to the revamped offerings. commerzbank is at odds over how quickly they should update shareholders. they want the decision as soon as possible a bloomberg has learned that deutsche's ceo wants more time to assess the deal. in two companies have been formal talks about a merger for nearly a month. that's your bloomberg business flash. manus: thank you very much. patients and flexibility are the keywords from the fed's march minutes. policymakers said they were grappling with said if he can uncertainty that led them to scrap their rate hike forecast last month. given the persistently low inflation, several members of the fomc say that the next policy move could be in either direction. host is still here.

as i read through the minutes, the majority are concerned. they are concerned about global issues. i get the feeling that the market just didn't get a dovish enough message from this particular set of information from the fed. would you agree with that do you think it's the fed trying to regain some optionality? >> i think the latter. i think the fed want to keep their options open regarding the soft patch in u.s. cpi inflation. i do think to some extent, the market has gotten excited. i've seen some likelihood functions out there suggesting that there's a 60% likelihood of a rate cut by the federal reserve. i don't like these likelihood functions to start with. they try to quantify something which is fundamentally not quantifiable. the reasonthat you've had quite a muted market reaction is economists, fed

watchers were looking at this. looking for any signs that the president of the united states recent comments about rate cuts but also in the last week about qe4 were going to be picked up. they really weren't. that was the potential for real market moving action. to some extent, it was a little bit muted as a result of their not being much hidden between the words suggesting the white house is pressuring the fed. nejra: we did see the 10 year yield take lower it -- lower. i will show you a chart of something you don't like. market pricing less than one full fed rate cut for this year. we've come back a bit from that aggressively dovish pricing. here forof a direction u.s. equities, how much potential does the earnings season have to give equities a further lift from here? >> i don't think the market is going to be trading near

earnings in the second quarter. if you look at what has happened in the first quarter, we've had a series of epf's fall back in terms of expectation. the market just ignored it. 15% total return. this was all fed language. i think we are still trading macro in terms of the u.s. market. is thate, the risk here that is out of kilter. that q1 performance is out of kilter with the underlying economy. theou get to pull back in second quarter, it's because the fed are going to have to have a slightly hawkish pivot if they need to keep a rate hike at the four quarter. i think that is underpriced in the market. i think that could be the thing that's quite corrosive for the equity market given its gains in the first quarter. nejra: interesting. so the positive come from the macro rather than disappoint in -- disappointed. our guest staying with us. speaking of earnings, coming up,

u.s. bank ceos face a hostile has committee. wall street has been more forgiving of their most risky products. we will discuss that and the earnings, coming up next. this is bloomberg. ♪

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i know there is huge frustration for many people that us extension.est i want us to leave the eu with a deal. enables us to do that. quite i think we delivered the best possible compromise. time.will not wait this compromise is how this is being framed. halloween, capable -- capable of love -- above 131. setting us up for any sort of article crisis in the u.k.?

>> theresa may is going to come back and sell that to the houses of parliament. her own backbenchers which are not going to be happy. the phrase of the day, suspended animation. volatility on the pound has dropped like a stone. it is strange we have seen eight days of sterling. the longest run in over a year on the downside. our guest yesterday said what we get from the summit is going to be a killer. let's talk to major u.s. bank ceos, members -- facing members of the house financial services committee. they took heat on a range of topics. jamie dimon and by -- brian voiced concerns.

the risky products still being embraced by wall street. just the banking ceos. leverage loans have been portrayed as a toxic asset that in fact of the broader market. these are loans made to heavily indebted companies. goldman is another one. strategist say there is a downside risk. look at how investors are treating it irritated not seem to care. at the highest on record. this recovery was the best quarter since 2010. two yieldsupport, starving investors, allowing them to defy with the banking ceos said yesterday. >> you are raising all the right flags. the first quarter results season, u.s. banks kicking that

off. be the last told get a boost from monetary policy for a while. where goes the rate curve, so goes the banks, they say. that will see that, how plays out when jpmorgan kicks off the results tomorrow. net interest income, a key driver, may well have heat. they saw the figure jump 10% in the fourth quarter. the group has warned it expects little change for this set of numbers. we will see goldman sachs report. bank of america's figures are out the following day. this could help counter unexpected drop in trading revenue, predicted by analysts along with weaker investment

banking results. work.at piece of dani burger. staying with the banking theme, attempt is falling flat with investors. , it is russell ward. latest cost-cutting flat withling so investors. >> it has been a week since they made the announcement of $1 billion of cost cuts. the stock has fallen about 3%. the stock is down more than 20% in the past six months. the price ratio, about half the value of the assets, the biggest

differential with its peers in 20 years. clearly, investors are not impressed. out for, are looking at least the analysts we have spoken to really want to look at is the pace of these job cuts. how it is going to affect revenue. we already know the bank has staff.tting the question is what is going to .appen to revenue >> the stock valued at a record discount. asia financethe editor? joining us is our partner in dubai.

good to see you can read the first phase of voting in the general election in india kicks off today. do markets stand? equity markets have been holding near record highs. >> that is correct. the markets currently have been quiet. we are seeing consolidation currently with the benchmark. trading exactly where they left off yesterday. we are seeing a little bit of consolidation playing out as we see. the first phase was underway today. the banking index, that is trending in the red today. change in thech indian rupee either. 68.98 against the u.s. dollar. there has been a considerable increase in the india volatility. that is long expected lines,

considering we are heading into the elections as well as the earnings season. >> there is more work on stacking up in the equity market. they were probably not dovish enough. thank you very much. how are you? >> you talk about these external drags on the economy. european growth. potentially a disruptive brexit. the china csi down nearly 2%. hong kong stocks down. foreign exchange, aussie dollar and canadian dollar, commodity linked stocks. but it has come

off. if slightly higher. they have a new deadline, october 31. that is my favorite holiday. i wonder if we will see anyone in halloween costumes. one of the bright spots, doom and gloom. one of the bright spots was luxury. you can see i am looking at revenue. defyly, they continue to expectations. one of the things i want to bring to your attention is the leather division and fashion. lists newsws often across the entire fashion industry. one of the things they are using to reignite is bringing in brand-new designers. tapping new talent. louis vuitton, the head of the menswear. a was recognized as being

consultant. he has his own brand. these are shares we are going to want to be watching. >> thank you so much. let's turn back to europe. officials agreeing the economic growth has held up despite the onslaught of week data. they're expecting to rely on long-term bank flows. mario draghi says the pop ability remains low, but the bank is willing to assess if it needs to tweak its negative policy. in the context of our regular assessment, we will consider whether the preservation of the favorable implications of negative interest rates for the economy the mitigation of their

possible side effects. >> the chief economist still with us. economist's team to take the message as dovish. what caught my attention, he was asked about -- i know not many people expect this until the second half. was what it would mean for the ecb's guidance. his answer was simply, i don't know. are you concerned that ecb does not have enough of a handle on not only the impact of negative rates but what they're going to do about it? >> i think that was a very deliberate answer. it was interpreted as a shock. tieoesn't want to commit to ring. the easy answer is to say we haven't worked and mission mechanism.

-- whether the transmission from the banking system, profitability through to credit lines. the corporate sector, household he wants more data. that by him time. whether the market will be sufficiently patient is a gamble he is taking. i think it was a deliberate act from the president. deliberate. almost sounds like a prime minister and the nikkei from the 1920's. have a look. george had a tendency to create ambiguity. in regards to the irish question, strangely enough. i decided to drop in a little questions.zone they are tightening. what do we need?

continues, and we are only a few weeks, a couple weeks from mario draghi's , whatever it takes, version two. which you delivered back in march. you are going to need a significant set if the path starts to influence the real economy. recently do not know. certainly to 3-4 weeks ago, they were not prepared to say that deterioration had passed through to domestic demand. they don't know whether it is permanentfactors or factors. they are not going to outline a program. >> in terms of the comment about the weakness of the eurozone extending into the rest of the year, you talk about the china

reflation trade coming back every we had another guest say that just yesterday. do you think they have been to negative? >> i do believe in the china reflation trade. they are still grappling with structural problems. i don't think that solves the major problems that before the eurozone. -- bigger problems than just the chinese upswing and downswing. they have this agreement with china following the summit took whopper eight on trade going

forward. if you think about both of those entities being threatened by the u.s., your enemy's enemy is your friend. is much softerip than many thought it was going to be. >> i love that word, before old. we talked about the banking system. talked about the banking system. vocal oned he was so that. what was your take away? stop moaning about rates and consolidate? what is my take away? he is going off message. in terms of the thing the market is going to focus on, interest stability story. why is he getting involved in

that conversation? and bankingation sector. >> the chief economist stays with me. 900 million indians are eligible to cast of their balance. -- cast their ballots. we will bring you the latest from mumbai. this is bloomberg. ♪

>> this is bloomberg daybreak: europe. c.am nejra cheri

>> let's go to hong kong. debra mao has the latest. brexit is set to be delayed until october. untilows the u.k. to stay halloween and a review will be held in june. offera may accepted the but she still needs to sell it. president trump has tweeted a warning to what he calls the brutal european union. trade policies with the u.s. would come back to bite it. pretty. and china are much agreed on enforcement over a trade deal. the two sides are nearing the court after recent high-level meetings. negotiators are discussing when the presence could sit down to sign off on the agreements. breaking news in the last hour.

sudan's president is reportedly stepping down. this follows months of government protests. he would be the second leader to quit this month. global news, 24 hours a day. powered by more than 2700 journalists and analysts. this is bloomberg. >> debra mao in hong kong. the biggest election in the world is underway. 900 million indians begin voting today across 20 states in a democratic exercise which will take a full six weeks to complete. hoping forter modi second term faces off against his opponent. let's go to mumbai. if you take a look at the market, it seems like we are set up in the market optimistically ahead of this election. what exactly is at stake for india?

>> 900 million voters will be deciding the destiny of this country in the next five years. 91 seats across 20 states. a repeatt stake, performance of 2014. the congress party, the principal opposition, they have been galvanizing the opposition together to ensure prime minister modi does not come back to office. we will have to wait until the 23rd of may to figure it out. it will be a close call. numbers involved in this election are hard to imagine. what would be the most important issue in this election? the promises he made to farmers, about employment?

to bewas always known secular and diverse. that idea has become an aggressive form of nationalism. this election will prove which way india goes forward. it will decide what india believes in. , it is going to be less about a national narrative and more about local issues for what works politically. smaller parties and alliances well hold the key who is going to form the government. front, jobs not being there. india work largely on emotions. the local issues and local emotions will matter a lot more. >> we don't do a motion on

daybreak. let's talk to our guest. how big it influence will be on the performance of local assets? you can join the debate. nejra and myself are there. give me your view on the question of the day. >> i was doing work on this yesterday afternoon, looking at whether there is huge differentiation. during the first quarter, it is striking how homogeneous returns have. has been a fed story taking some of that risk off the table for the broad e.m. space, a strong reversal of that 10 year

long trade. haven't been relevant. elements may start pivotd the fed from their to a more steady state. >> what about the idiosyncrasies across asset classes? .tocks versus bonds i was talking about the fact performedts have not as well as e.m. equities. canary in the coal mine about global growth, are they? i am not sure the canary is telling the right story. what iare anticipating am am, the upswing toward the end of the year. you should be seeing some of that pressure come on. taking it back to the india

story? 54% return. local issues will be remembered. for your viewers, it is where the macro takes are. ,hen the local issues mentioned pricing to drive market . >> i looked at the past six months. if we take the chart up, it is the indian rupee. and the indonesian rupiah. athought they would take cushy below.

oil is on fire. when does the oil ratchet begin to play into a headwind for e.m.? >> particularly if you get a reversal. we think the danger zone starts to be when crude goes above 80. you want to understand whether some of the supply concerns over venezuela, any sort of pickup in global demand will see that next 10-15 dollar move. thank you so much. simon will be continuing the conversation with us on bloomberg radio. dark, it ist is

massive, it is massive, swallows everything in half. we will bring you everything on brexit, next. this is bloomberg. ♪ want more from your entertainment experience?

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>> good morning from dubai. this is bloomberg daybreak: europe. top stories. >> i want us to leave the eu with a deal so it is an orderly exit. this decision enables us to do that. >> delays ahead. eu agree to a brexit extension until october, but theresa may needs to sell the plan. the fed grapples with significant uncertainties. f view.that

the attention, shifts to the bottom line. >> welcome to daybreak europe. delayed again. the eu has agreed to postpone the departure until the end of october. it was a compromise between for a shorts desire extension and a call for a longer one. let's get the latest from anna edwards who joins us from brussels. talk us through what has been agreed and how theresa may is going to sell this. >> thank you. good morning.

is anas been agreed extension to the end of october, halloween as many have noted. it was not a date anybody had penciled. -- stayed up late into the night working out which date they would go for. it seems like it is neither long or short. markets perhaps moving nowhere. tryinguck in their heads to work out what has been agreed. it does avert the cliff edge that could have in the looming tomorrow. we started out thinking technically they would end up leaving with a deal not in place. that has been averted until october. get ducks. manages to in a row and can leave before that, it is allowable to do so. article 50 can be revoked.

asking the u.k. not to waste this time. she said she is going to speak to the house later on. her conversations with the labour party will essentially continue. to speak orting her later. one of the dynamics coming out is how the eu 27 have been united were divided. we have seen a lot of unity up until this point. macron, seemingly isolated toward to push the u.k. a brexit sooner rather than later. he seems a little happier than some. denialests others are in that u.k. is leaving. with the front pages having fun, back to you in london.

-- let's look at the donald trump tweet. ever inporting as brussels. breaking news coming on the front management side. outflows,ter net positive investment movement of about $4.5 billion in the quarter. that is the total funds under management coming from first quarter positive investment movement. the markets moved higher, they did well, they had some net outflows. that was the conversation we had yesterday, all about asset management. they do great jackets that

keep me warm when i'm outside westminster. income, to ¥60 billion. ¥260 billion. operations, ¥88.4 billion. profit coming in a little weaker than expected and's. cutting the four-year operating income. meeting the estimates on the numbers. another headline, ted baker. naming linzie page the ceo. says theyndent probe are naming linzie page the ceo. let's get broader equity markets. stock,e higher on the

across the markets. you saw perhaps that reaction to what was seen as a dovish mario draghi. stocks rose. the fed not as dovish as some wanted. dax futures slightly on the back foot. >> we had a little bit of data coming out of germany. pretty much in line. numbers for the year on year coming in a second. itself in manifesting the market. dovish enough? significant uncertainties. the market than

thought. italian government bonds are where the focus was. these could be the pivotable point for europe to address spending issues. six hours, they have agreed to postpone the departure. let's bring this into the conversation. good to see you. here we are. a brexit the lake. i would say it is neither fish nor fog. what are the risks that could materialize? make sure these are solid discussions with the labor party. what is the risk as the result of the delay?

delaying it six months means more uncertainty. good for business confidence. we need to understand why we have this extension. is she going to get any progress with her own politicians in parliament? headway get more getting this through parliament? >> mark carney is hoping for the best. that mantra?ld it is hard to predict what is going to happen. more clarity. u.k. stocks look attractive.

there is a lot of opportunities for providing great valuations. >> where are the greatest opportunities? is it perhaps on a global perspective? which has that relationship with china? overseas earnings? fantastic companies, there is of thenception all companies are purely domestic. you have companies on the market cap scale. 75% of their revenues come internationally. you expect them to benefit from commodity prices. >> one of the companies you like

his wh smith. >> it is one of those companies that transitions well. retail. around travel the move into the u.s. has not been really priced into the markets. they are one of the few that has done well because they are very good on focusing on profitability. products are going to have the highest margins. >> we had some numbers. they are confident. nejra asked this question. do we just get on and keep spending at the current rate, given the ongoing delay we have an brexit? do you like retail in the u.k.?

>> retail in the u.k. is challenged. aroundinty is not good brexit. management is a waiting to see what happens. u.k. equities provide value. markets,e emerging china starting to look attractive. relativeo look at the values. just to let viewers know, first half revenue has come in ahead of estimates. equities investment director. let's get the first word news with debra mao in hong kong. chief facing a growing from congress. despite the wide array of

topics, there was a consensus cybersecurity is a major issue facing the financial system. >> it is probably the biggest risk the financial system faces. >> i believe it is a clear and present danger. >> this is the single most existential threat. war onre ineffectively a cybersecurity. minister is's prime facing an election. coalitionl national is vying for a third straight term. policy differences are likely to include taxes, wages, and reducing emissions. lyft shares taking another nosedive. the offering expected to be the largest in the u.s. this year. it could be among the 10 largest

of all time. isomberg has learned uber seeking to raise about $10 billion. global news, 24 hours a day. this is bloomberg. thank you very much. coming up, we are live from the spring meeting. our interviews. as well as the governor of the bank of italy and the south african reserve bank. >> when you are traveling to work, tune into bloomberg radio. i will be joining you there from 8:00 a.m. to take equity market open. this is bloomberg. ♪

london.a.m. in

we are 43 minutes away from the european equity market open. >> i am manus cranny, safely back in the studio. it was not dovish enough. panic revisions on the upside. futures eke out the tiniest of gains. as far as the pound is concerned, she has to come home to the parliament and sell it to them. >> more on the euro. , evenly higher yesterday with the dovishness. the 10 year yield lower. up a basis point now. oil-rich reading, struggling to extend gains.

u.s. crude, the highest since 2017. the biggest exercise in democracy kicks off as millions of voters spoke to the old spirit we look at the size and scope of its operation -- go to the polls. >> 900 million people are eligible to vote in india this year area that is really the population of the european union, the u.s., and brazil combined. the numbers you need to impress. voters will elect representatives to 540 seats of the lower house of parliament. out of the 2300 registered parties, there are seven that are recognized nationally. the two biggest are the indian national congress and the ruling bjp. the election commission will set up one million electronic

polling stations across the country and mobilize around 10 million officials to manage the process. stages.l require seven results will be announced on the 23rd of may. >> the numbers are staggering. influence will elections across the emb on the performance of local assets? she is still with an address -- with nejra. be one of those rolling stories. the currency has done well over the last six months. are you a buyer of equities? we have a lot of elections coming up and india is one of the most the love to stories. down, veryons

worried about whether he can keep his majority in terms of the elections through the next few weeks. if you look at india as a market, it is fairly expensive. a lot of markets moved on the hopes of what reform would do for the economy. you need to focus on the fundamentals of companies. that creates short-term volatility. >> that takes me to my next question. analysts are ratcheting up their profit forecast. lenders and energy firms seem to drive profits. how does that color your view? profitability is very good. the macros are fantastic. the demographics are good. you have good company

management. i still think the valuation is more expensive. you might find opportunities in areas like brazil where a lot of that risk is fed into fundamentals. >> thank you so much. stay with us. the equities director. let's get a quick update on your business flash. latest attempt to revamp is falling flat with investors. is valued at a 58% discount. the widest gap since they began tracking the data. volkswagen looking at buying a significant stake in its chinese partner. bloomberg has learned the biggest automaker mandated

on the sachs transaction. there is a market value of nearly $2 billion. jetblue preparing to join the competitive markets for business travelers between the u.s. and europe. its jfk andfrom boston logan hub to london airport. thatans to use their best can fly 4000 nautical miles. >> thank you so much. debra mao in hong kong. -- with there from fed decision, i want to take you to a chart that shows u.s. stocks heavily exposed to western europe.

bloomberg intelligence has been warning europe, not china, is the underappreciated risk. >> in europe, the economy has been sluggish. a lot of the market is driven by trade. sluggish growth in europe has a hindrance in terms of global growth. there are countries where u.s. committees might be trading. a big week in the u.s.. and tie itry together. we are seeing upgrades. panic in terms of upgrading u.s. equities. do you think the bank reporting we are going to see could tilt or skew the q2 performance? we arere the upgrades seeing coming through. how important are banks in that momentum? jpmorgan and wells

fargo. they will set the tone for what expectations are. investment banks, they have had arguably a tough first quarter. the government shutdown in january. atot of stock in the market the moment. even though markets have rallied, volatility has been fairly low. most investment banks to have a more challenging first quarter. >> a lot of people say earnings are going to matter for further upside. to add tobe looking exposure in the u.s.? is quites. market expensive. i think earnings matter more than ever. wages are increasing. cost'sariffs have meant are going up. what we are going to be looking

at for the next quarter in terms of the earnings is the management. what are they giving in terms of guidance? are they talk about this quarter or looking out further into the year? profits should look better. gardens will be very important to this quarter. .> guidance and rhetoric freight could be critically important. i hope we can get the trump tweet up. dad behavior. a i want to focus on the second item. the eu is a brutal trading partner with the u.s.. sometimes you have to let people read before it all comes back to bite you. is this one of the understated risks we are assuming? the next shoe to drop? ,lacks the rhetoric from trump

the one consolation if they go down to the wto rules, there is her rigor around at structure. the retaliation between the u.s. and europe might be contained. much for being with us. i am bringing you back in from the cold. investment director. that draws us to a close for the week. i'm back in the office. it has been a rough and tumble week. i am -- i know you are glad they did not leave me in the desert production team would have. >> glad you are back in dubai. have a great weekend. the political risks potentially mounting up as theresa may tries

to sell that delay. cable has been holding up. 30 minutes from the equity market open. this is bloomberg.

good morning and welcome to bloomberg markets. we are live in brussels for the emergency brexit summit. >> the markets say stay patient. in rains. central banks say they will hold the course. trade next.utures -- mixed.